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The Trump Administration’s 'Clean Networks Initiative' has no place in European telecommunications policy

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Announced in August 2020 by Secretary of State Mike Pompeo, the so-called Clean Networks Initiative seeks to decouple the United States from all Chinese telecommunications equipment and mobile communications technology, including mobile apps. It also extends to data servers and transmission network infrastructure like undersea cables - write Simon Lacey.

 

Simon Lacey

Simon Lacey

On its face, the initiative might appear to be a comprehensive approach to network security that seeks to leave no part of the digital economy untouched. Yet although it claims to be based on “internationally accepted digital trust standards”, this claim has never been substantiated since the initiative was announced.

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If the initiative were, in fact, based on international standards, it could not discriminate so blatantly against equipment and technology from one country: China. Any international accepted digital trust standard would have to be based on some degree of consensus, and the global consensus among cybersecurity experts is that measures based on a simple “flag of origin” approach do nothing to improve network security. As one expert, Maria Farrell, explained “[the Initiative’s] specifics don’t add up terribly well [and] don’t speak to a good understanding of how networks function”.

 

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The Administration’s approach also seems at odds with that of America’s own technology sector. In 2011, the Information Technology Industry Council (ITI), a trade group that unites US hardware and software companies, released its Cybersecurity Principles for Industry and Government. This document articulates 12 principles that “seek to provide a useful and important lens through which any efforts to improve cybersecurity should be viewed”.

 

Principle No. 2 says that “[efforts] to improve cybersecurity must properly reflect the borderless, interconnected, and global nature of today’s cyber environment”. ITI goes on to explain that policies that comply with this principle will improve interoperability of digital infrastructure by making it easier to align security practices and technologies across borders, while also facilitating international trade in cybersecurity products and services across multiple markets.

 

Interestingly, the ITI also refers to the World Trade Organization’s Agreement on Technical Barriers to Trade, which it notes “calls for non-discrimination in the preparation, adoption, and application of technical regulations, standards, [and] avoiding unnecessary obstacles to trade”. The Clean Network initiative as currently formulated is the exact anti-thesis of these principles.

 

It also stands in marked contrast to that of the European Union, a major US trading partner and geopolitical ally. In early 2020, the EU announced a “5G toolbox” to guide regulators on how to secure 5G communications networks as they are being launched. By adopting the 5G toolbox, EU Member States have committed to “move forward in a joint manner based on an objective assessment of identified risks and proportionate mitigating measures.”

 

The EU’s 5G toolbox calls on member states to strengthen security requirements for mobile networks, assess the risk profile of suppliers based solely on security grounds and objective criteria, and to ensure that the 5G ecosystem consists of a healthy plurality of competing suppliers by requiring operators to have an appropriate multi-vendor strategy (i.e. that they source equipment and technologies  from at least two and ideally three or more vendors).

 

The EU’s concerns about 5G network security are based on the critical role that communications networks and data play in modern economies. Nowhere do the EU specifications call for the arbitrary and discriminatory singling out and banning of equipment vendors based in China.

 

A better approach to securing 5G networks and equipment is one developed by the global industry itself. The Network Equipment Security Assurance Scheme (NESAS) was created  by GSMA, an industry organisation representing more than 750 mobile network operators worldwide; and by 3GPP, an umbrella organization of seven standards-setting organizations, which develop protocols for mobile telecommunications.

 

NESAS articulates many of the internationally accepted security requirements that network equipment vendors must comply with, and it lays out a blueprint for independently verifying compliance with ISO requirements. Nowhere is there any provision for excluding a product simply because the company that manufactured it happened to be headquartered in a country that has fallen out of favour with the United States executive branch, or with certain members of Congress.

 

The Clean Network initiative actually makes it less likely the that United States will adopt any of the demonstrably effective steps it could take to improve network security. These steps require a multi-stakeholder approach and the active participation of all ecosystem players – including equipment vendors, operators, regulators, businesses, and even individual users.

 

As commentator David Morris has also pointed out, the current unilateral approach being pursued by the Trump administration risks undermining international cooperation and abandoning the rules-based system of international trade cooperation that the United States has traditionally championed. This is a bad idea, best relegated to the trash heap of history and replaced with more collaborative, more effective approaches that will actually enhance the security of the world’s communications networks.

 

* The author is Senior Lecturer in International Trade at the University of Adelaide and previously served as Vice-President Trade Facilitation and Market Access at Huawei Technologies in China.

Belgium

Commission approves €45 million Belgian scheme to support companies affected by the coronavirus outbreak

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The European Commission has approved a €45 million Belgian scheme to support companies active in the Brussels-Capital region affected by the coronavirus outbreak and the restrictive measures that the Belgian government had to implement to limit the spread of the virus. The public support was approved under the State Aid Temporary Framework. Under the scheme, which goes under the name 'la prime Relance', the aid will take the form of direct grants. Eligible beneficiaries are companies of all sizes active in the following sectors: nightclubs, restaurants and cafés (‘ReCa') and some of their suppliers, events, culture, tourism, sport and passenger transport. In order to be eligible, companies must have been registered in the Central Bank for Enterprises (‘la Banque-Carrefour des Enterprises' ) by 31 December 2020. The Commission found that the Belgian scheme is in line with the conditions set out in the Temporary Framework. In particular, the support (i) will not exceed €1.8 million per company; and (ii) will be granted no later than 31 December 2021.

The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measure under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.64775 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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European Commission

Macro-financial assistance: EU disburses €125 million to Bosnia and Herzegovina and €50 million to the Republic of Moldova

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The European Commission, on behalf of the EU, has carried out another round of disbursements under the €3 billion macro-financial assistance package for ten enlargement and neighbourhood partners. The programme is a concrete demonstration of the EU's solidarity with its partners to help respond to the economic impact of the COVID-19 pandemic. The Commission has disbursed €125 million to Bosnia and Herzegovina and €50 million to the Republic of Moldova. This support is provided through loans at very favourable rates. With these disbursements, the EU has successfully completed five out of the 10 MFA programmes in the €3 billion COVID-19 MFA package, and disbursed the first tranches to all partners. The Commission continues to work closely with the rest of its MFA partners on the timely implementation of the agreed policy programmes. 

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European Commission

NextGenerationEU: European Commission endorses Finland's €2.1 billion recovery and resilience plan

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The European Commission has adopted a positive assessment of Finland's recovery and resilience plan. This is an important step towards the EU disbursing €2.1 billion in grants to Finland under the Recovery and Resilience Facility (RRF). The financing provided by the RRF will support the implementation of the crucial investment and reform measures outlined in Finland's recovery and resilience plan. It will play a significant role in enabling Finland to emerge stronger from the COVID-19 pandemic.

The RRF is the key instrument at the heart of NextGenerationEU which will provide up to €800bn (in current prices) to support investments and reforms across the EU. The Finnish plan forms part of an unprecedented coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.

The Commission assessed Finland's plan based on the criteria set out in the RRF Regulation. The Commission's analysis considered, in particular, whether the investments and reforms contained in Finland's plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.

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Securing Finland's green and digital transitions  

The Commission's assessment finds that Finland's plan devotes 50% of the plan's total allocation on measures that support climate objectives. Finland has announced an ambitious target for achieving carbon neutrality by 2035. The reforms and investments included in the plan will make an important contribution to Finland achieving this objective. The plan addresses each of the highest emitting sectors in turn, namely energy, housing, industry and transport. It includes reforms to phase out the use of coal in energy production, changes to taxation to favour cleaner technologies, and a reform of the Waste Act with increased targets for recycling and reuse. On the investment side, the plan will finance clean energy technologies and related infrastructure, industry decarbonisation, the replacement of oil boilers with low- or zero-carbon heating systems and private and public charging points for electric cars.

The Commission's assessment finds that Finland's plan devotes 27% of its total allocation on measures that support the digital transition. The plan includes measures to improve high-speed internet connectivity, particularly in rural areas, support the digitalisation of businesses and the public sector, enhance digital skills of the workforce and support the development of key technologies such as artificial intelligence, 6G and microelectronics.

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Reinforcing Finland's economic and social resilience

The Commission considers that Finland's plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing the economic and social challenges outlined in the country-specific recommendations addressed to Finland in recent years.

It contains a broad set of reform measures to raise the employment rate and strengthen the functioning of the labour market, ranging from the transformation of Public Employment Services to improving and facilitating access to social and healthcare services. The plan includes specific measures to provide integration support for young people and people with partial work-capacity. The plan also includes measures to strengthen the effective supervision and enforcement of Finland's anti-money laundering framework.

The plan represents a comprehensive and balanced response to the economic and social situation of Finland, thereby contributing appropriately to all six pillars referred to in the RRF Regulation.

Supporting flagship investment and reform projects

Finland's plan proposes projects in all seven European flagship areas. These are specific investment projects, which address issues that are common to all Member States in areas that create jobs and growth and are needed for the green and digital transition. For instance, Finland has proposed to provide €161 million to investments in new energy technologies and €60m toward the decarbonisation of industrial processes to support the green transition. To support the digital transition, the plan will invest €50m in the rollout of rapid broadband services and €93m to support the development of digital skills as part of continuous learning and labour market reforms.

The Commission's assessment finds that none of the measures included in the plan significantly harms the environment, in line with the requirements laid out in the RRF Regulation.

The Commission considers that the controls systems put in place by Finland are adequate to protect the financial interests of the Union. The plan provides sufficient details on how national authorities will prevent, detect and correct instances of conflict of interest, corruption and fraud relating to the use of funds.

Commission President Ursula von der Leyen said: “I am delighted to present the European Commission's endorsement of Finland's €2.1bn recovery and resilience plan. I am proud that NextGenerationEU will make a significant contribution to support Finland's goal to become carbon neutral by 2035. The plan will also help bolster Finland's reputation for excellence in innovation with support for the development of new technologies in areas such as artificial intelligence, 6G and microelectronics. We will stand with Finland throughout the plan's implementation to ensure that the reforms and investments it contains are fully delivered.”

An Economy that Works for People Executive Vice President Valdis Dombrovskis said: “The Commission has today given its green light for Finland's recovery and resilience plan, which will set the country on a greener and more digital path as it recovers from the crisis. This plan will help Finland to meet its ambitious carbon-neutrality target by 2035, with reforms and investments that will reduce carbon emissions from energy production, housing, industry and transport. We welcome its focus on high-speed connectivity, particularly for sparsely populated areas to help maintain their economic activity, and on digitalising smaller businesses and the public sector. With reforms to boost employment and strengthen the labour market, Finland's plan will promote smart, sustainable and inclusive growth once it is put into effect.”

Economy Commissioner Paolo Gentiloni said: “Finland's €2.1bn recovery and resilience plan is strongly focused on the green transition. No less than 50% of its total allocation is set to support climate objectives, helping to speed the country towards its ambitious target of carbon neutrality by 2035. The plan also contains an array of measures to boost Finland's already strong digital competitiveness. I particularly welcome the Finnish plan's strong social elements, with measures to raise the employment rate, tackle youth unemployment and facilitate access to social and healthcare services.”

Next steps

The Commission has today adopted a proposal for a decision to provide €2.1bn in grants to Finland under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission's proposal.

The Council's approval of the plan would allow for the disbursement of €271m to Finland in pre-financing. This represents 13% of the total allocated amount for Finland.

The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in the recovery and resilience plan, reflecting progress on the implementation of the investments and reforms. 

More information

Questions and Answers: European Commission endorses Finland's €2.1bn recovery and resilience plan

Factsheet on Finland's recovery and resilience plan

Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Finland

Annex to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Finland

Staff-working document accompanying the proposal for a Council Implementing Decision

Recovery and Resilience Facility

Recovery and Resilience Facility: Questions and Answers

Recovery and Resilience Facility Regulation

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